Why are RBS and NatWest mortgage rates rising right now?
RBS and NatWest mortgage rates are rising primarily because lenders price their fixed-rate products based on swap rates and gilt yields — not just the Bank of England base rate. Even when the base rate holds steady or falls, internal funding costs can push lender rates higher independently. As of June 2025, both Royal Bank of Scotland and NatWest have repriced several fixed-rate products upward, contributing to a surge in borrower searches of between 600% and 1,900% for terms related to these lenders' rates.
If you've received a rate change notification, are approaching the end of a fixed deal, or are simply trying to understand why your mortgage is costing more, this guide explains exactly what's happening — and what to do about it.
What drives mortgage rates at RBS and NatWest — and why is it not just the base rate?
Lenders like RBS and NatWest set their fixed mortgage rates based on swap rates, not solely on the Bank of England base rate. Swap rates reflect the market's expectations for where interest rates will be over the coming 2, 5, or 10 years — and they can move sharply even when the base rate stays flat.
Here's how the chain works:
- Gilt yields rise — driven by inflation concerns, government borrowing, or global bond market movements
- Swap rates follow — lenders' wholesale funding costs increase, as tracked through Bank of England yield curve data
- Lenders reprice upward — to protect their margins, RBS, NatWest, and peers raise fixed rates across 2-year and 5-year products
- Borrowers see higher headline rates — even though the base rate may not have moved
According to ONS inflation data, UK CPI has remained stubborn above the Bank of England's 2% target, keeping market expectations for rate cuts more cautious than many borrowers had hoped. This is a key reason swap rates — and therefore RBS and NatWest fixed deals — remain elevated in 2025.
How much have RBS and NatWest mortgage rates actually increased?
Both RBS and NatWest have made multiple upward repricing moves in 2025, with some fixed-rate products increasing by 0.20–0.45 percentage points compared to earlier in the year. As of June 2025, typical 2-year fixed rates from these lenders sit in the 4.6%–5.2% range depending on loan-to-value (LTV), while 5-year fixes range from approximately 4.4%–4.9%.
To understand how these rate changes translate into real monthly costs for your specific situation, use our mortgage calculator to compare payments at different rates, or check your loan-to-value ratio to see which pricing tier you fall into.
| Product Type | Approx. Rate (Jan 2025) | Approx. Rate (Jun 2025) | Change |
|---|---|---|---|
| 2-year fixed (75% LTV) | 4.35% | 4.79% | +0.44% |
| 5-year fixed (75% LTV) | 4.15% | 4.55% | +0.40% |
| 2-year fixed (90% LTV) | 4.85% | 5.19% | +0.34% |
| 5-year fixed (90% LTV) | 4.60% | 4.94% | +0.34% |
Note: Rates are indicative based on publicly available product information as of June 2025 and are subject to change. Always check directly with the lender or through a broker for your personal rate.
Should existing RBS or NatWest borrowers remortgage now or wait?
If you are within 6 months of your current fixed rate ending, you should start exploring remortgage options immediately — most lenders, including NatWest, allow you to secure a new rate up to 6 months in advance without penalties. Waiting until your deal expires could mean slipping onto a Standard Variable Rate (SVR), which is typically 1.5–2% higher than the best available fixed rates.
Here's a framework for deciding what to do:
- Check your existing deal end date — if it's within 6 months, begin the process now
- Request a product transfer quote from NatWest/RBS and compare it against the wider market
- Use a whole-of-market broker — NatWest's internal product transfer may not be the cheapest option available to you
- Assess your LTV — if your property has increased in value, you may now sit in a lower LTV band with better rates
- Consider whether to fix for 2 or 5 years — if rates are expected to fall, a 2-year fix gives flexibility; a 5-year fix provides payment certainty
Our remortgaging guide covers the full process in detail, including how to avoid early repayment charges and what documents you'll need.
What should first-time buyers do if NatWest and RBS rates keep rising?
First-time buyers should not put their purchase on hold solely because one or two lenders have repriced upward — the broader mortgage market remains competitive, and other lenders may offer more favourable rates for your deposit level and income. The key is to use a broker who can access the whole market rather than being limited to a single lender's products.
Key steps for first-time buyers in the current environment:
- Get a mortgage affordability estimate before approaching any lender
- Check the government's affordable home ownership schemes, which can reduce the mortgage amount you need
- Factor in stamp duty costs using our stamp duty calculator — as of April 2025, first-time buyer thresholds have reverted, making this calculation essential
- Compare fixed vs. variable rates — in a rising rate environment, fixing sooner rather than later provides payment certainty
For a full walkthrough of the buying process, see our first-time buyer guide.
Is it better to choose a 2-year or 5-year fixed rate given current conditions?
In the current environment, a 5-year fixed rate often provides a marginally lower interest rate than a 2-year fix, whilst also protecting you from further rate rises over a longer period. However, a 2-year fix preserves your ability to remortgage sooner if rates do fall significantly.
| Factor | 2-Year Fixed | 5-Year Fixed |
|---|---|---|
| Rate level (typically) | Slightly higher | Slightly lower |
| Payment certainty | 2 years | 5 years |
| Flexibility to remortgage | High — sooner access to new rates | Lower — early repayment charges apply |
| Best if you think rates will… | Fall significantly within 2 years | Stay high or rise further |
| Best for… | Flexibility-focused borrowers | Stability-focused borrowers |
According to the Bank of England's monetary policy communications, the path for rate reductions remains data-dependent and gradual. This suggests rates are unlikely to fall sharply in the near term, which strengthens the case for fixing for longer — though your personal circumstances should always take priority.
Are there alternatives to remortgaging with NatWest or RBS if rates are too high?
Yes — borrowers who need to raise funds but find current remortgage rates unattractive may want to consider a second charge mortgage, which leaves the existing first charge deal intact. A second charge loan allows you to borrow against the equity in your home without disturbing your current mortgage rate — useful if you're mid-fix with significant equity.
Learn more in our second charge loans guide, or use the second charge calculator to estimate how much you could borrow. For borrowers looking to reduce monthly outgoings, our debt consolidation guide also explains how mortgage-based consolidation works.